Print4.1.1: Locational Factors
Ore bodies are located where you found them, and often are not ideally located by any definition. They may be inside the Arctic Circle, high up in the Andes Mountains of Peru, or in the tropics of Indonesia to illustrate just a few out-of-the-way places. Occasionally, they are near metropolitan areas or small towns. Regardless, you will assess the following:
Transportation Options
You must get your product to market, and you must be able to get supplies to the mine. Transportation options suited to the one need may be unsuitable for the other, so both must be independently evaluated. Generally, access to rail is necessary. Where is the nearest railway, and will they be willing to serve a spur to your property? Can you get a right-of-way to build a spur? A highway suitable for tractor-trailer use may be needed as well, or in lieu of a railhead on your property. Sometimes, it will be appropriate to move your product on a waterway, e.g., a river or even the ocean. Can you access a load-out facility to get your product on barges or boats, or do you need to build one? These costs will have to be estimated at this stage, as the costs to get supplies to the mine can raise your production costs. Similarly, your customers will bear the cost of transporting the product in most cases. Although you may be able to mine at a competitive cost, your transportation costs could adversely affect your competitiveness. If you are producing a construction aggregate, your practical limit for transporting the product is on the order of 50 miles. If you are producing iron ore, you may be able to transport it for hundreds or even thousands of miles.
Availability of Labor
The labor requirements will depend on the size and type of mine, but in general, you will require experienced miners who are familiar with the method, equipment operators, welders, mechanics, electricians, and skilled managers. Electronics and computer technicians, surveyors, engineers, and accountants are normally part of the human resource requirements, as well. Some of these services may be provided on a regional basis to multiple mines, especially if your new mine will be part of a large company with other mines. If you’re evaluating a potential stone quarry in the Atlanta, Georgia area, labor will be readily available. If the proposed project is an underground gold mine in rural Nevada, you may have to bus the workers for approximately two hours from the nearest town to the mine site –and you will do this each day. If the proposed mine is located in the Australian outback, you will probably set up a fly-in fly-out operation, in which you use jet charters to transport your workers. They will then remain on-site for two or three weeks, working every day, and then return to their home city for a week or so of leave prior to beginning the cycle all over again. You get the idea! Labor availability can span these extremes, and be anywhere in between. Regardless, the effort and the cost to staff the proposed operation will be considered early on.
Infrastructure
The mining operation will require infrastructure, i.e., electricity, water, roads, buildings, housing, hospitals, schools, and so on. Is this already there, or will you have to create it? How long will it take, and what will it cost? Mining engineers of the 19th and early 20th century were, by necessity, quite skilled at building towns and the necessary infrastructure, as well as opening and operating mines. Companies operating internationally in remote or underdeveloped locations still find the need today to develop the infrastructure. The population in the region of these mining operations often experiences a significant improvement in the quality of life, e.g., availability of clean water, excellent medical care, good schools, and so on. Again, however, an early decision includes consideration of the time, effort, and cost to establish such an infrastructure.
Employee Satisfaction
The location and its climate can affect employee satisfaction, which will impact productivity of the workers and your ability to recruit and retain the workforce. These can be significant risks for the proposed project. If the mine is located near an urban area with an abundance of cultural and entertainment opportunities, and the climate is pleasant year round, then your employee satisfaction is likely to be very high. On the other hand, if the mine is inside the Arctic Circle, you may face significant challenges recruiting and retaining a workforce. Of course, you can “buy” some measure of employee satisfaction with high wages and large bonuses.